Examination of Witnesses (Question Numbers
Sir Dave Richards and Richard Scudamore
5 April 2011
Chair: Good morning. This
is a further session of the Committee's inquiry into football
governance. I welcome for the first part of this morning's session
the Chairman of the Premier League, Sir Dave Richards, and the
Chief Executive, Richard Scudamore. Adrian Sanders will begin.
Q586 Mr Sanders:
Sir Dave Richards:
Mr Sanders: Do you
accept that the Football Association is the governing body of
the English game?
Sir Dave Richards:
Q587 Mr Sanders:
Sir Dave Richards:
It is the governance of the game.
Q588 Mr Sanders:
Would English football benefit from having a stronger Football
Association as well as a strong Premier League, and will you support
FA Chairman David Bernstein's efforts to achieve this?
Sir Dave Richards:
We have always supported the FA in every way we could. The FA
is an association of people, but it needs to keep the balance
among those people who are associated with it. As regards supporting
David Bernstein, yes, we will support David Bernstein in what
he is trying to do.
Can I maybe add some detail to what Sir Dave has said? The FA
is the governing body of football in this country. Under the FIFA
statutes, that is the way it must be and has to be. We are a league
and therefore we come under the auspices of the FA and the FA
sanctions our rulebook every year. That rulebook is effectively
the contract between our member clubs and therefore we do support
that. We have a history, certainly in our time at the Premier
League, of supporting the reforms of the FA whenever they have
come along. Sir Dave was instrumental in moving the board to six
and sixnational game/professional gamein 1999. That
was four representatives from the Premier League, two from the
Football League and six from the national game. Those reforms
were brought in around then.
We also were and are on record as being the only
people who came out and unconditionally accepted the Burns report.
When Lord Terry Burns did his report on the governance of the
FA, out it came and we supported it. Even though there were elements
of it that we would not have, perhaps, as individual items have
supported, we absolutely supported it. So we have a history of
progressive modernisation of governance and we would be more than
happy, as I say, to support proportionate proposals.
But Dave does hit upon the fundamental point that
the Football Association is an association of interests, and that
is its genesis. Its genesis goes way, way back to the mid-19th
century: J.S. MillI am sure you are all familiar with himfreedom
of conscience and opinion, freedom of association, freedom of
getting involved in pastimes and interests that interest you.
So, 1859. The FA itself was being formed around about 1863 and
this is what we arewe are an association of interests.
It might be difficult, it might be tough, but that is what we
are. That is where we are today and I would defend the FA. No
matter what other issues we may discuss today or at any point,
I would absolutely defend the FA's right to associate as an interested
groupthose who are interested in football and those who
actually run football to form as an association.
Q589 Mr Sanders:
That is an encouraging answer, because the FA has told us that
it wants to rethink the architecture at the top of the game. Do
you therefore agree that the respective roles of the FA and the
Premier League need to be looked at and, if so, how should the
division of responsibilities change?
Well, there is a concept of constant improvement. We have never,
ever rested on our laurels and therefore, in a sense, we are looking
at all things all the time. We have strategic reviews; we have
regular dialogue. I think people misunderstand a lot of the relationship
between us. We have such regular dialogue. Every two weeks the
executives of all three football bodiesFootball League,
Premier League and FAget together. We exchange and work
together on most initiatives. Yes, if there is ever a discussion
around moving the game onprogressing the gamewe
want to be active participants in that because we think we have
a role to play, but we are not resistant to change, as I said.
Any review that comes along we will take our full part in. I go
back to Burns. Burns, as I say, was absolutely endorsed by us.
We were the first to do that and I think we were the only body
to do it.
Q590 Damian Collins:
Sir Dave Richards, do you think, thinking purely of the England
national team, there will be an advantage to having a winter break
in the season or fewer premiership games played in the season
as part of a reduction in the number of domestic matches?
Sir Dave Richards:
It goes a lot deeper than that. Obviously we want to do the very
best we can for the English game, being the England team. We want
to do the best. We have been discussing ways forward on how we
could introduce a winter break by possibly looking at the FA Cup,
looking at the league, and Richard and the executives of the FA
have been looking at that to try to find a proper synergy where
it actually works.
Damian, your question hits upon a number of thingshelping
the England team and, effectively, fixture congestion. I have
to say that in my time here we have had four goes at this, looking
at the fixture calendar. It is very difficult because if you go
back, from the formation of the Premier League, remember English
football was historically 22 teams in the top division and each
team playing 42 matches. That is not now the situation. We are
now down to 20. If you remember in the season prior to the Premier
League's formation the FA Cup was open-ended and, therefore, the
replays went on ad infinitum or ad nauseam, depending on your
particular view of each particular match. Now, winning the FA
Cup is six matches plus replays, but at least only one replay
and it doesn't go on for ever. The Football League Cup used to
be eight rounds plus replays to win it, and that has been reduced
to seven finite rounds with every game played to a finish.
When you are looking at fixture congestion, which
really is your question, I think, I am afraid we have to look
at our friends at UEFA and FIFA as more the culprits than ourselves.
UEFA used to havein the season we started in, 1992-9313
match dates they required. Now they need 21 match dates to fulfil
their fixtures. FIFA traditionally were about nine or 10 international
dates, which is now averaging 12. The difficulty is somebody has
to give something up. We put on 380 events and those events are
watched around the world. They are extremely popular. Those 380,
if you took two teams out, don't go down by a few; you go down
to 306 events. There is no way that you would do that in terms
of public interest, in terms of fan interest, in terms of the
expense of other competitions.
If you want me to talk about other competitionsthe
Football League Cup, for example, or the FA Cupwe have
never advocated the radical altering of those competitions because
they are hugely, hugely important to the solidarity of football
in this country. The FA Cup is worth about £100 million value.
Basically, if you mess with that competition, that reduces. Of
that £100 million, £75 million is for the benefit of
the FA and redistribution. The calendar is extremely difficult.
We have always said if it could be practically done we would advocate
some sort of winter break, but we have failed because it is just
hard to come up with a practical suggestion.
Q591 Damian Collins:
Thank you for a very full answer, and you are right, the general
congestion of the calendar was part of my question. I did mention
the English national team and neither of you mentioned the English
national team in the answer to the question. Sir Dave, do you
think all this complexity and all this work that might be undertaken
in reducing congestion in the fixture list, if that could be achieved,
would be to the benefit of the English national team?
Sir Dave Richards:
I think it is an old answer to give you. The winter break would
help providing we didn't put extra games in on friendlies. That
is always the danger, but more and more, our Chief Executive and
the executives of the Football League and the FA are looking at
these scenarios all the time, and looking at not just what is
best for the Premier League, but how we can develop better youngsters
and better playing of the England team.
Can I go back to the winter break
Q592 Damian Collins:
If I may, Mr Scudamore, I would like to follow up on the question
before you come in. In what you are saying in your answer, do
you accept that there is an issue that people in football have
to address, which is that England players are tired at the end
of the season because they play too much football and we should
look at how they can prepare for major championships by easing
some of that burden on them?
Sir Dave Richards:
You say, how can we prepare for major championships? I can tell
you the preparation for the World Cup was incredible. The training,
the high altitude training, the training in South Africayou
couldn't have done any more. It is not about just saying, "We
want to find a little bit more space for the English team to play."
It is about how we can bring the whole game to a higher level
to win competitions.
Can I just answer specifically about the winter break? We have
no body of absolute evidence that a break around about December/January
time, whenever you might choose to do it, would make a physical
difference come May/June. That is one of the problems. We have
opinion. There is a body of opinion on this subject, but there
is no empirical evidence that says take your break thenclearly,
any break any time. Then there are some doctors who talk about
having to get back to match fitness after that short a space of
time. It is all quite difficult and we certainly don't yet have
a body of evidence that says, "A break now leads to success
in June and July." There are many other factors, which I
am sure you will want to ask us about.
Q593 Damian Collins:
Of course. There is another part to my question. The reason I
am particularly directing it to you, Sir Dave, and the reason
I am particularly asking about the England national team, is whether
you think you are conflicted as Chairman of the Premier League
and sitting on the FA board, because the FA is responsible for
the national team and you have responsibility both to the Premier
League and to the national game. Certainly, your answer betrays
the complexity and the torment that you might find within yourself,
but I am not sure whether the England national team is uppermost
in your thoughts.
Sir Dave Richards:
I can tell you that when I go on any tournaments or help in organising
any tournaments, my uppermost thought is how we can do it best.
Not the team, but how we can deliver the facilities, the training
time, the transport, the hotel, the food, because that was part
of my job. My job was not to decide how the team trained, when
it trained, what the tactics were. That is the manager's job,
but it is our job to give him the time to facilitate all those
things. People talk about conflict. I don't really understand
how you get to that because it is an association of people. People
say, "Well, you were Chairman of Team England during the
World Cup." It is just a name of a person who had the responsibility
if anything went wrong. Whether a player got injured, whether
it was the medical staff, whether it was part of the staff that
had to be flown home, they were responsibilities that I had, but
not the team and the way it played and the way it trained. That
was the manager's job.
Q594 Damian Collins:
But if the England team manager said to you, "I think the
players are too tired. We need to reduce congestion in the game,"
and the FA board agreed, there was consensus among FA people that
was the right thing to do and we should look at that, would your
first reaction be, "Let us go away and see how the Premier
League can make a contribution to that along with other competitions."?
Sir Dave Richards:
No, it wouldn't.
Q595 Damian Collins:
Do you not think that does slightly conflict you? You said no,
it wouldn't; that is not how you would respond. Do you not think
that gives you a slight conflict being Chairman of the Premier
League and being on the FA?
Sir Dave Richards:
If you just give me some time to answer you, I will try and answer
you the best way I can. If you say that fixture congestion is
too much, we have to go right back and start looking at how fixtures
are made at UEFA, FIFA, the FA and the Premier League. The Premier
League has tried over many years to make the calendar fit to suit
everybody's purpose. It has tried extremely hard. The manager
has never, in all my yearsI have been on the FA since 1994said
to me, "The players are too tired, they have over-trained,"
because it is his job to decide that. The board and everyone else
do not have any input into that. It is purely what the manager
In a sense, Mr Collins, the issue has moved on because I think
you would admit, Dave, you were the reluctant sole representative
with that title during South Africa, because Lord Triesman had
left the organisation, and the minute David Bernstein arrived
you handed over that title or that pass had gone. Some may call
it a hospital pass, who knows? But it has been handed on to David
Bernstein and that is right in some ways. In some ways we are
talking about an issue that has passed.
Q596 Damian Collins:
I am not doubting these are very difficult issues or saying that
there are easy solutions to them. A lot of our inquiries have
looked at the FA board and the way it is made up, the people who
are on it, the way they make their decisions. Is there an inherent
conflict of interest in your role, Sir Dave, and would it be better,
as has been recommended to us by Ian Watmore, that the FA has
a wholly independent board and, therefore, these conflicts don't
Sir Dave Richards:
We would like to discuss that further, but can I say to you the
FA needs the whole of the balance from the Premier League, the
Football League, the national game, the Conference. It needs that
because each person brings something a bit special to it, where
we have accountants, club chairmen, club chief executives, professional
game chairmen, professional game representatives and secretaries
from the national game, because it creates that balance inside
the FA of what is really needed. What we are not saying is that
it doesn't need some independence.
Q597 Damian Collins:
But you would not go so far as having a wholly independent board
or a majority independent board?
Sir Dave Richards:
I think it would be a retrograde step if you did that.
Q598 Damian Collins:
One final question: given you think there should be a role for
independents on the FA board, should there be a role for independent
directors on your board, like most successful companies have independent
Sir Dave Richards:
We are governed by shareholders.
That is the point. You cannot conflate our board with anything
like a business board. Effectively, if you go back to Cadbury
or you go to the Combined Code, it quite clearly says that independents
are there to represent the shareholders' interests. All our shareholders
get to make every material decision that goes on. All our 20 shareholders
meet at least five times a year, usually six, and we have ad hoc
meetings if an issue arises. I think the maximum we have had is
12 meetings in a year during certain times when the European Commission
issue was around. Basically, our constitution, deliberately written
by Rick Parry and our forefathers, enabled the shareholders to
vote on every material issue. Anything that exposes the shareholders
to either a £200,000 liability or an income, a contract that
generates £200,000 or we spend £200,000we had
one only last weekall the shareholders have to approve
that. Therefore, effectively, our shareholder meetings are the
board meetings. Once a year we agree on a rulebook and then, yes,
we have summary ability to apply that rulebook during the year
where we use extensive external legal advice, so you can't conflate
When I came back to the Football Association, though,
the reality is that since the mid-19th century, as I said before,
these associations have been formed and it is an association of
interests. On the idea that you would have a wholly independent
board, independent of whom? Representing whom? The whole point
is with the FA, it might make it more difficult, but the essence
of the FA has to be a representative body where representatives
of the game come together in an association to try and do what
is in the best interests of the whole game. I would defend the
FA to the ends of the earth, really, to make sure that it was
allowed to associate as an association of interests.
Q599 Damian Collins:
You both are in favour of having independent representation on
the FA board, but you wouldn't countenance it for the Premier
League, even if that might bring an outside view, some other expertise?
Just so as we are clear, a personal view: I don't think independents
necessarily are necessary on the FA board because it is an association
of interests. However, if that is what Mr Bernstein, as the FA
Chairman, wishes to promote, I think we would support that, as
we did with Burns. I did say we didn't like everything in Burns,
but Burns basically said, "We think you should have independents
here." It said an awful lot of other things as well, which
I said to you. In the round, we think Burns, therefore, was worth
Q600 Paul Farrelly:
Mr Scudamore, have you not just said of the FA, "We are an
association of interests."? In 2008, responding to a speech
given by the now departed Lord Triesman, you said, "We are
like competitors. We compete for sponsorship and for television
rights and we are in the same space." How do representatives
of the Premier League manage those competitive interests while
at the same time, as you say, recognising the FA as the authority
and the governing body of the game?
Of course, in one sense I can't deny we do compete, but there
is a difference between competing and it necessarily being conflicting.
Of course, when it comes to our broadcasting rights, for example,
we don't compete directly in the sense of we are out to market
together and we are out to market at the same time and we are
taking each other's revenues. In fact, we Chinese wall that entire
discussion. We are regulatedheavily regulatedin
But, yes, there is an element on the commercial side
where there are properties that we each have, but it is not a
zero-sum game here. When you go back to the way the game has grown,
the game has grown immeasurably in interest. If you look at all
the data since the Premier League was formed, 1992-93 to today,
our revenues have grown; I can't deny that. Our television viewing
has grown; can't deny that. But so have attendances grown. Attendances
have grown at the Football League; attendances have grown certainly
at England matches; television rights have grown at the Football
League; television rights have grown at the FA. The whole economic
interest in English football has all grown. It is not a zero-sum
game. The game has generated huge amounts of interest and we have
not just become of national interest. As you know, we have become
of global interest.
You raise an interesting point, though, as to where
the properties of the FA sit in terms of the governance structure
because, in effect, like us they are competition owners, just
like UEFA are competition owners. That is a very separate issue
from the governance in terms of disciplinary matters and regulatory
matters, and it is also a very different issue in terms of running
the England team. It is a different issue in terms of running
Wembley. Of course, that has always been the situation where these
interests come together and it is perfectly possible. We, even
within our Premier League environment, have to manage and reconcile
individual clubs' commercial aspirations with our own collective
Premier League aspirations. The clubs to date, over the 20 years
since the Premier League has been in existence, have had this
interesting dynamic where they have stayed very solid with the
collective on television rights; on other commercial matters,
they are out there looking for the same sponsors and competing.
It doesn't mean to say you can't reconcile that, you can't manage
that. There is space for all of us and I don't see it is an inherent
difficulty in running the organisation.
Q601 Paul Farrelly:
Is it unequivocally a good thing that the likes of Newcastle Town
from NewcastleunderLyme get the opportunity through
the FA Cup to play the Manchester Uniteds?
Q602 Paul Farrelly:
Is that unequivocally good for the game?
Absolutely unequivocally good, yes.
Q603 Paul Farrelly:
Sir Dave, I put a passage in a book to Lord Triesman, so it is
only fair I put the same passage to you. This goes back to the
time of Adam Crozier, before his resignation. The author of the
book, David Connit is The Beautiful Game?said
of the events at that time, when you were questioning the potential
participation of the clubs and the future of the FA Cup, "I
have it from three members of the FA's main board that Dave Richards
was constantly threatening to withdraw the premiership clubs from
the FA Cup or saying that clubs would withdraw if he didn't get
his way on an issue, usually over money. The sources complained
that they would not debate with Richards in any detail. He would
fly off, be dismissive or issue a threat. I put this question,
whether he threatened that the premiership clubs would withdraw
from the FA Cup, to Richards through the Premier League press
office because he never talks publicly. He was walking past and
I asked him and he said, 'Bollocks'." That was the passage
I put to Lord Triesman in the context of the picture he was painting
of the behaviour of the professional game. Could I give you a
fair opportunity to respond to that in more than one word?
Sir Dave Richards:
Be careful which word you use.
Sir Dave Richards:
At the FA Cup Committee, we had lots and lots of debates about
what was the best way forward. I had a particular friend on the
FA Cup Committee in Barry Taylor and we had this rivalry about
what is best for English football in the FA Cup. One day we were
discussing replays and he said, "No, no"he has
always been a great advocate of having to keep replays, which
sometimes we look at and we think, "That's odd," but
that is the way it is and we accept that. It got on to, should
clubs be seeded? Should clubs be seeded so that they could pick
out of the box that club against that club? I said, "If you
do that I will take it back to the Premier League and I know some
of them will not do that and they won't play." That is the
kind of statement that was made. When Mr Conn rang and put that
statement to our press officer, Phil French, I did use those words.
I did say to him it was that word. Yes, sir, I did.
Q604 Paul Farrelly:
That is a lovely response and a lovely anecdote, but it doesn't
respond to the central question, which is the portrait that is
painted of the behaviour of the professional league representatives
on the FA board. Let me give you another instance. If you recognise
the FA as the authority in the governing body, why did you not
allow the Football Association, either in the same terms as Lord
Triesman wanted or in different amended terms, to make any submission
to Andy Burnham's questions, rather than simply referring to the
submissions made by the Premier League and the Football League?
Sir Dave Richards:
Sir, may I give you the actual story? Andy Burnham came out to
the FA and asked for a submission on the governance of the game.
A dialogue was started with the Premier League, the Football League
and the FA. Originally, it was going to be one submission from
all parties, but after a lengthy discussion between the three
executives they decided the best way was to co-ordinate a reply
from all three parties, and they did that. They worked on it for
weeks and weeks. There was consultation between the three leagues
and between the board, saying, "Do we believe that is right?
No, we should take it back and look at it because that doesn't
fit with that." Eventually, the submissions were made to
Lord Triesman came to a board meeting after the submissions
were made and agreed with the executives of the three different
bodies, came to the board with some papers and said, "This
is the FA's response to the DCMS." It had already gone in.
Nobody had seen those papers. There had been no consultation.
The deadline had passed, and not just me, but everybody on the
board, was astonished at the way that came about. Lord Triesman
started to discuss the changes and the board said, "We have
submitted the information that we want. We won't allow that to
go forward." Now, that was not just me as one independent
person; it was 10 people. It is a matter of record in the minutes,
Can I add some facts to that, because I think it is important?
You certainly, in your jobs as Members of Parliament, will recognise
the need for proper consultation. When Andy Burnham's letter arrived
in the autumn of that year, we went on an extensive consultation.
We held club meetingsin small groups, wasn't it? It is
hard work when you have to meet every club on every topic, and
we met them at every club. We had full club consultation. It was
on our shareholders' agenda for two of our meetings. We produced
four drafts of our submission, which the clubs fully approved
the final draft. We also consulted with our FA executive colleagues
and our Football League colleagues. Within the time frame agreed,
by 31 March, in went our submissions. It was May before Lord Triesman,
without any consultation, wrote his own paper and sprung it on
usremember, we discussed our paper with the FA, because
the FA attends our shareholders' meetings and everything else.
All of a sudden, Lord Triesman's paper was late and it had no
consultation process. As I say, it is a matter of history and
conjecture as to whether the individual ideas within that paper
had merit; in fact, most of themI think probably 75% to
80%were already covered by way of topic in our papers and
have subsequently been acted upon by both ourselves and the FA.
But it is just no way to run an association of interests, without
Q605 Paul Farrelly:
I want to ask one final question of Sir Dave. This is a curiosity
question, but it is asked by quite a number of people. You are
the Chairman of the Premier League, but you are not the chairman
of a Premier League club. Has the Premier League ever considered
having one of its own as Chairman, possibly on a rotation basis?
Sir Dave Richards:
I used to be a chairman of a club. When I first was asked to do
this job I was a chairman of a club. The Premier League shareholdersMr
Parry will be able to fill you indecided that they had
to have someone independent of a club. I was elected and I left
Our rulebook, our constitution and our articles are very clear
that the board is wholly independent of any club interest. From
the time the season starts right through to the time the season
ends we have to apply that rulebook in a very independent way.
Q606 Paul Farrelly:
But that is not good enough for the FA to be independent?
No, we are independent of the shareholders.
Q607 Paul Farrelly:
No, but the same model is not good enough for the FA?
Well, it is an association of interests. We are a limited company.
They are an association of interests. As I say, we have no pathological
objection to independence, but total independence doesn't work.
Q608 Chair: Sir
Dave, you have been a member of the FA board for 16 years, I think?
Sir Dave Richards:
Q609 Chair: It
has been suggested that part of the problem is that the FA board
is a narrow group of various interests and both the board, and
even more so the Council, are hardly representative of either
the modern game or modern Britain. Is that something that causes
you any concern?
Sir Dave Richards:
We have always looked at the representation of the board and every
single person is elected. They are elected members of the board.
They are elected by councillors, leagues and the Premier League.
We have always wondered about inclusion and what it really needs,
but we have always followed the Chairman of the FA, who has been
the natural leader, and followed his wishes. When Burns came along,
we were quite up for all the changes that Lord Burns put in because
we thought it became very inclusive and it was good for the game.
Unfortunately, it didn't get through in its entirety. It was piecemealed
to give the FA what they wanted at that time. So, are we up for
inclusion? We are always looking at the way things ought to be
Q610 Chair: But
you say you always followed the Chairman of the FA, who takes
the lead, and yet one of the people who made this point most strongly
was Lord Triesman, who was Chairman of the FA. He suggested that
he was blocked, principally by you.
Sir Dave Richards:
You know, the statement that Lord Triesman made really saddened
me and made me feel a little bit dejected, because on the statement
that he made that I blocked him, first, I have never blocked anyone.
It is a free and democratic board at the FA and to think that
the Premier League Chairman could block nine others is ridiculous.
Secondly, Lord Triesman suggested that I bullied
people. Well, that really hurt me because for 12 years I have
been one of the chairmen at the NSPCC, which raised quarter of
a billion pounds for childrenfor bullied and abused children.
Lord David knew that and he knew how passionate I was about protecting
all these different styles of things. It makes me wonder why he
said such a thing because I thought I was reasonably close to
Lord T because we travelled quite extensively together. I helped
him very much. When he wanted to be introduced to people and wanted
to be taken into different places, I went with him. I was always
very supportive to him. Why would he ever think that I blocked
him? Sir, there may have been differences of opinion with me and
Lord David, but I never brought them into the boardroom.
Chairman, can I just add something? I don't know Lord Triesman
as familiarly as Sir Dave doesI certainly wouldn't call
him Lord Tbut the reality is that Lord Triesman, at no
point in his tenure, brought Burns back to the table because had
he done that we would have absolutely supported that initiative,
and I think that is very important.
I would point you back to Roger Burden's evidence
last week. He very eloquently, I think, on behalf of the FA board,
talked about his view of how the FA board functioned, his view
that he was not bullied or they were not bullied. Ian Watmore
also clearly wouldn't recognise that when he was asked. Roger
Burden quite articulately talked about how the FA board, in his
view, worked. We, the Premier League, now have three representatives
on the board and there is no way we have a majority position on
that board, as the professional game does not. I think you need
to listen to the evidence from others as well, and I know you
will do that.
Q611 Chair: Can
I just be clear? Sir Dave, you are saying on Lord Triesman's efforts
to broaden representation, both on the board and on the FA Council,
you were absolutely four square behind him in that?
Sir Dave Richards:
Lord Triesman only ever once spoke about it and it was in the
original document. He had ample opportunity to bring Lord Burns's
proposal back as Chairman and start to work in the FA board to
get where he wanted to be. He had ample opportunity, but he never
Q612 Chair: Were
you disappointed? Were you encouraging him to do so?
Sir Dave Richards:
Look, I never encouraged him; I never discouraged him. The only
thing that I did discourage him from doing was becoming Executive
Chairman of the FA, which probably was one of the main agreements
we couldn't reach. He wanted to be Executive Chairman of the FA
and that was a very difficult scenario. We did disagree and we
did consult with the other board members about it. But regarding
progress at the FA, no, sir, he cannot say that.
I think Sir Dave raises an interesting point that most of this
discussion we have been having around Lord Triesman, his submissions
and certainly around the Andy Burnham letter was done at a time
when, effectively, there was not a Chief Executive of the FA.
They had announced Brian Barwick's departure in August of that
year, the evening of a friendly against Czechoslovakia and he
gave notice that he was leaving. Not wishing to personalise it
to Brian, there was an element of lame-duck nature of his tenure
at that time, and again I think Lord Triesman did attempt to become
Executive Chairman on a number of occasions, but the board resisted
that particular move.
Q613 Jim Sheridan:
Sir Dave, I can almost feel a lump in my throat when you talk
about the sincerity and passion you feel about being hurt by Lord
Triesman. Could I just clarify that the only reason that his submission
was rejected was because it was time barred?
Sir Dave Richards:
No, sir, it wasn't a question of being time barred; it was a question
that Lord Triesman brought a document to the board that had never
Q614 Jim Sheridan:
Sir Dave Richards:
No, sir, it wasn't a question; it had never been discussed. It
had never been discussed at all.
The facts on that particular document are that the entire boardthe
national game as much as the professional gamesaid that
that was an inappropriate document for the FA to submit. What
was submitted was a smaller, shorter letter that did get the approval
of the entire FA board, which is good governance.
Q615 Jim Sheridan:
But the evidence that Lord Triesman gave us is the document that
he brought forward there wasn't a page turned; it wasn't even
looked at. I think you said, Richard, that it was time barred.
It was too late; the date was passed. Is that the case?
Sir Dave Richards:
The submission had been made. The submissions had been made to
Government and all agreed.
Q616 Jim Sheridan:
No, I am talking about Lord Triesman's submission.
Let us get the facts absolutely right. The Football League's and
the Premier League's submission had been made within the time
that Andy Burnham had set. We had promised him 31 March. I think
it was May before Lord Triesman's paper was produced, almost with
literally no warning. It was professional game board one day,
main board the next. The main board of the FA at that time said,
"There is no consultation on this paper. We don't wish you
to submit this paper." So, a letter was written, as I understand
it, to Andy Burnham, which was for Andy Burnham either to accept
or not accept into his evidence. That was up to him. He can write
a letter to the Secretary of State if he chooses, but on this
issue of time barring, I was making the point that it was late
in terms of the deadline we were all set. The Football League
and the Premier League were working with the FAwith the
Executiveon these submissions, and it was a surprise to
everyone when this suddenly arrived at the very last minute.
Q617 Jim Sheridan:
What I am trying to establish is, did someone tell Lord Triesman
that there was a cut-off date at the end of March?
Well, he would have known; he had exactly the same letter from
Andy Burnham that we had asking to make submissions. His public
policy advisers would have known. They would all have known. We
all knew we were working to a 31 March deadline, which is why
we spent October and November consulting all the clubs, convening
regional club meetings in small groups and going back to two board
meetings, because we had to get this done by 31 March, which is
the way we, the Premier League, operate. I can only give you by
contrast the fact that the genesis of the Lord Triesman paper
was a very different genesis.
Q618 Jim Sheridan:
Therefore, Lord Triesman must have ignored this letter and carried
I think you would have to ask him that.
Q619 Dr Coffey:
Could you just confirm how long you had sight of the proposals
of Lord Triesman? I have heard from other sources it was about
48 hours before you were asked to approve this. Is that true?
I think it was a professional game board meeting where we suddenly
saw it. I think it was a Wednesday before a Thursday. It was somewhere
between 24 and 48, depending on where it was, yes. But remember,
I have no role in this other than I attend the professional game
board, where I think we saw it first, and it was the next day
that the main FA board saw it for the first time.
Q620 Dr Coffey:
So a very limited amount of time for such a substantial paper?
That is it, and there was no consultation.
Q621 Dr Coffey:
I want to revisit something I brought up last week with the FA
about what I thought was a terrible example of governance, which
was the renegotiation of the contract of the England manager.
I think you were Chairman of Club England at the time, Sir Dave?
Sir Dave Richards:
Q622 Dr Coffey:
Okay, but you were involved on the board. Could you shed a bit
more light on your role or on what happened?
Sir Dave Richards:
Yes, I certainly can. Fabio Capello's contract had a clause in
it and Mr Capello spoke to Lord Triesman, because Lord Triesman
was the Chairman of England at the time.
Sir Dave Richards:
Yes, Team England. It was on 22 April that I was summoned to a
meeting with Fabio Capello's son; Adrian Bevington, the company
lawyer; Lord Triesman and me to talk about the Capello Index,
because Mr Capello had brought out an index on performance of
players, which was against his contract and he could not do it.
He had to seek permission of the FA and he had been talking to
the Chairman prior to that. He requested a meeting and we went
to that meeting. During that meeting, Mr Capello's son brought
up the question of the clause being taken out of his contract.
He said Lord Triesman agreed that the mutual break clause could
be deleted in line with his previous assurance to Fabio Capello
and that he wanted him to stay until 2012. That was the very first
time we had heard of that, but it was pre-agreed with the Chairman
and Mr Capello that that would happen. Unfortunately, I had to
pick the pieces up with that, and the press being what they are,
I took the brunt of it.
Q623 Dr Coffey:
I think at the time you may have taken a little bit of the credit
for it in securing Fabio.
Sir Dave Richards:
No, I didn't take any
Dr Coffey: But I recognise
the brunt of it. Do you think it would have been appropriate for
you, Sir Dave, to have said, "We can't make this decision
here and now, it needs to go to the whole board."?
Sir Dave Richards:
I wouldn't make decisions like that. You can ask all my colleagues
on the board. I have always been one to consult: the Premier League
board, the Football Foundation board, the European Leagues board,
the International. I am a consultative person. I will not make
a decision just like that which affects the kind of issues that
Q624 Ms Bagshawe:
Can we talk a little bit about Portsmouth? What more could the
Premier League have done to have prevented Portsmouth from going
On the genesis of the Premier League, if you go back, the rulebook
has evolved. The rulebook was 142 rules when it was first crafted;
it is now 814 rules. Given the revenues and given the way clubs
have been run, and basically the way English football has been
since 1888 in many ways, there were things in the rulebook, certainly,
that we never envisaged we ought to see at Premier League level.
With the income that we were generating centrally, with the way
the clubs generally have been run and the professionalisation
of the clubs, certainly over 20 years and the time I have been
involved, it was hard to see, I have to say, how a club at the
highest level could get itself into those particular difficulties.
We slightly foresaw it maybe some five or six years
ago when we introduced the sporting sanction rules that basically
said it is unacceptable for a football club to go into administration,
because clearly there is a not perfect, but an almost perfect,
correlation between the amount you spend and your performance.
That has been the same since time began. We absolutely put those
rules in, as did the Football League, in saying, if you overstretch
yourself, if you spend more money than you can afford, if you
get yourself into financial difficulty, we are going to impose
a sporting sanction because it is not right with your playing
peers that you should enjoy the same status as you did before.
Ours is a nine-point sanction. So we made that step.
We had also, through the licensing systems and various
other systems, improved our financial regulatory position quite
considerably, but I have to admit to this group that we didn't
foresee a club with that amount of revenue being able to get itself
into the sort of difficulties that Portsmouth got into. In fact,
we were a train in motion. If you read our submission to Andy
Burnham, if you read what we had already embarked upon, we brought
forward to the summer meeting of 2009 considerable changes in
our financial regulations, the irony being probably that one of
the only clubs to vote against some of them were Portsmouth. They
were members at the time.
We then went on to strengthen those rules further
in September and then we went on to strengthen them still further
post the Portsmouth situation. We strengthened them further again
at the summer meeting of 2010. Yes, I am admitting we could have
done more, but on good governance, you can't have a rulebook that
entirely envisages every situation, just like you don't have laws
in this country that envisage every unknown situation. Should
we have foreseen it? Perhaps yes, but having seen what happened
at Portsmouth we acted very quickly, very swiftly, and we think
the rulebook now is very robust. Certainly, the experience of
this summer with club takeovers and acquisitions, we have been
put in a much, much better position in being able to regulate
our way through that.
Q625 Ms Bagshawe:
On learning the lessons, Portsmouth obviously went through many
ownership changes before it went into administration. There has
been some speculation in the press, Sir Dave, that you approved
successive ownership changes. Do you think that the fit and proper
persons test was properly applied? In the case of Mr Ali Al-Faraj
there has been some suggestion in the press that not only was
he not a fit and proper person, but he wasn't even a person at
all and didn't in fact exist. Do you recognise these criticisms?
I recognise that he has been referred to as "Mr Al-Mirage"
on more than one occasion. The reality is that we went through
all the tests that one would need to go through to get a passport
in this country, and we had his passport. We had documentation;
we had written documentation. Yes, we didn't meet him face to
face, which is why our rules have changed. Now we insist on an
absolute meeting. We insist on meeting face to face. The rules
have changed. But yes, we did not meet that particular person
and that is why that rule has changed. We believe he did exist,
though, but I can't say I have seen him.
Sir Dave Richards:
Can I make it quite plain I never approved anyone? We have a system
within the league. It is very tight. It goes through lawyers and
different systems so no one individual could approve it. There
was one occasion I was in Rome for a Champions League game and
a gentleman asked to see me. He was an Arab gentleman and he asked
to see me to explain the fit and proper persons test. He was the
gentleman that was trying to buy it. I went to see him. I was
there no longer than 20 minutes. I explained to him it was all
about documentation and coming to the Premier League and presenting
who he was and what his funds were and where the funds were from,
and I left. I had never met the gentleman before and I have never
met him since.
It is an important topic, a serious topic, and, Chairman, I sent
you a letter last week that detailed quite a lot of what happens
in our now strengthened owners and directors tests. I think it
would also be useful if I sent you separately a supplementary
piece of information, which is when anybody wants to look at acquiring
a Premier League club or an interest in a Premier League club
there is now a very detailed checklist and set of checks that
we make and evidence that is required. I think I will send you
this as supplementary to the letter I sent you last week, because
we don't underestimate how important this topic is.
Chair: That would be helpful.
Q626 Ms Bagshawe:
I take it on board, Mr Scudamore, that you have just said that
you recognise there were some failures and you have strengthened
your governance on that issue because of those failures. Can I
put it to you that you have just said that the Premier League
was taken by surprise that a club at Portsmouth's level could
get itself into such trouble? Given that the club was failing
and being taken over again and again, I take the point that the
fit and proper persons test has now been strengthened, but at
the time, as these successive changes were going through, and
with the Premier League clearly having been caught on the hop,
did it not occur to you that, even under the old rules, you should
be applying the then existing fit and proper persons tests more
rigorously than they seem to have been applied at that time?
Except for the fact that the fit and proper persons tests were
about establishing, effectively, criminality and unsuitability
because of that criminality. Therefore, we were unable to establish
that any criminal act or any breaches of the absolute rule had
been undertaken. Remember, it was the same time we were introducing
the financial rules, which are about sustainability, and they
are different things, but they are wrapped up in the same thing.
Q627 Jim Sheridan:
Before I move on to the next question, can I put on record my
surprise that in relation to the Andy Burnham submission, as we
are now calling it, in the runup to 31 March there wasn't
a submission that came in from the Chairman of the FA yet no one
bothered to ask the question why is there not a submission from
the Chairman of the FA. However, I think you are quite rightthat
is a question for Lord T.
You have a number of jobs in football. I am
just reading here that you are Chairman of the Premier League.
You are also on the board of the FA, you are Chairman of the European
Professional League and you represent English football on UEFA's
Strategy Council. That is a very long list of jobs and it would
suggest that you are a very influential and powerful person. Do
you think that you having all these posts and also the fact that
you are paid by the Premier League means that you can ensure that
there is no conflict of interest when you apply your director
and ownership tests for prospective new owners?
Sir Dave Richards:
Can I say to you I have been on the board of the FA for 16 years.
In 16 years we have had, to my knowledge, only four votes. One
of those votes was concerning the Premier League. We stood up,
the three Premier League representatives, and said, "We have
a conflict of interest. We can't take part in this. We will leave
the room." We were told not to leave the room, but we would
abstain from the vote. We didn't influence it; we didn't have
The positions that I hold in UEFA and European Leagues
are elected positions. I didn't go looking for them. We are a
member of the European Leagues and one might say that the Premier
League is a successful vehicle and that people want to be associated
with it and they want to know how it works. When they elected
me Chairman, it was, "Please work with us to show us how
to become as successful as the Premier League." If you look
at the progress the European Leagues have made, it has been very
substantial, because we have 30 leagues, 980 clubs, some of them
very tiny, that are all part of our system. We work with UEFA
on solidarity payments bringing more solidarity money into the
smaller leagues. That is the way it works. It is not a question
of whether I am powerful or not. It is the Premier League. It
is the Premier League and its brand that attracts people to want
to be associated with it.
Mr Sheridan, the reality is Sir Dave is elected by our clubs to
represent us at the FA. He is elected by the European Leagues
to be Chairman of that, and it is because he is Chairman of the
Premier League that they respect our league, they respect what
this league has achieved over the last 20 years. Many of the leagues
in Europe wish to emulate and copy elements of what we do and
I think, as I say, it is the fact of the position that Sir Dave
holds that he gets those elected positions. You will recognise
the power of the electorate in returning people to office.
Sir Dave Richards:
Can I say I was elected to the Strategy Council of UEFA? Mr Platini
I have worked with for a number of years. When you ask him how
Sir Dave is, he always says, "Sir Dave has great input and
he is good at what he does." He quoted that in the paper
and said how well he got on with me.
Q628 Jim Sheridan:
As politicians, we know how elections work and we know how you
get elected to powerful positions. Indeed, some of our previous
witnesses suggested that most of these discussions took place
in the corridors, not at the main meetings.
Sir Dave Richards:
No, sir, they didn't because the European one
Q629 Jim Sheridan:
You remind me of the election of the Speaker where he is dragged
out from the crowd.
By the scruff of the neck.
Jim Sheridan: "I don't want to do
Sir Dave Richards:
No, I would willingly do what the European Leagues ask. I have
a term of three years, and that is the term. On the Strategy Council,
I have a term of one year and that is it.
Q630 Jim Sheridan:
You have mentioned other European leagues. We recently visited
Germany and saw how the licence system works in Germany, quite
proficient in terms of looking at clubs' finances in particular.
Do you see a role for similar in England?
Sir Dave Richards:
That is Mr Scudamore's because it is an executive matter.
Of course, the reality is we have a licensing system. We have
a very much more robust licensing system now than we did two or
three years ago. Our rulebook is effectively the licensing system
for clubs within our league. I go back to those 814 rules. That
is a licence; it is a contract between the member clubs as to
how they are going to conduct themselves with each other. Unless
you meet those rules, effectively you are not licensed.
Then, of course, we have UEFA licensing, which has
been introduced and we have been instrumental in the introduction
of UEFA licensing, working with our colleagues. It is an extremely
good example of how you work with the Football Association. On
the brunt of the work, you heard from the Football Association
and Alex Horne last week talked about how the executives of the
Premier League and the FA work together on UEFA licensing. For
example, this year, 19 out of our 20 clubs have applied for a
UEFA licence. Therefore, you have a licensing system. You have
the law of the land, which you are collectively responsible for
delivering to us. You have our own rulebook. You have the Football
Association's rulebook, which then requires our rulebook to be
sanctioned, and you have a UEFA licensing system for the majority
of our clubs. Some of our financial rules are tougher than UEFA's.
In effect, you have a licensing system in this country and we
recognise that concept.
Q631 Jim Sheridan:
Both of you have expressed a desire to work with the new Chairman
of the FA. If he comes forward and wants to change the rulebook
that you refer to, will you co-operate with him, particularly
on the question of licensing, or is the rulebook there for ever?
We will co-operate in any discussion about improving English football.
I can't tell you here and now that I will agree with everything
Q632 Jim Sheridan:
So you are not ruling out the possibility of a licence system?
We would be foolishwell, we have a licensing system and
the licensing system works very well right now. In fact, nobody
would argue that the UEFA licensing system, as we have incorporated
nearly all of it into our own rulebook to cover every club, isn't
actually applied. In fact, the only such element of that UEFA
licensing system, which is not even in place yet, is the break-even
concept. It is the only bit that isn't covered also in our rulebook.
Effectively, we have a licensing system.
Q633 Jim Sheridan:
The answer I am trying to get is the Chairman, in his evidence,
was open minded about the licensing system similar to the one
in Germany, but you seem to have a closed mind about it.
Mr Chairman, we are open minded about anything that improves the
governance of our clubs and English football. We will discuss
Q634 Jim Sheridan:
But we have a licensing system. Improving that licensing
Q635 Jim Sheridan:
No, I am talking about a licensing system
Improving that licensing system, of course we will listen.
Q636 Paul Farrelly:
Just very quickly regarding the new rules, transparency and honesty
are key to their effectiveness. In June 2009 in your evidence,
you cite the rule that you brought in that said that, "Clubs
must disclose not only to the Premier League but also publicly
who owns interests of 10% or more in the club." Does that
mean beneficial interests?
Yes. It does, yes.
Q637 Paul Farrelly:
It has to mean beneficial interests?
Yes, it does.
Sir Dave Richards:
Q638 Paul Farrelly:
When does that bite? Let us take Leeds. Leeds may get into the
top two in the Championship or they may very well be involved
in the play-offs. At what point do you tell Leeds, "If you
wish to be a member of the Premier League you must comply with
9 or 10 June, whenever our AGM bites.
Q639 Paul Farrelly:
9 or 10 June?
Yes. Our AGM is yet to be fixed. It will be on 9 June or 10 June.
From that point they will be given their share certificate in
the Premier League. At that point the Premier League rulebook
bites. From my understanding of the way our rules are written,
we absolutely will require disclosure from Leeds United that is
over and beyond that which the Football League requires.
Q640 Paul Farrelly:
Why didn't your rules bite beforehand?
Because they are not our member club.
Q641 Paul Farrelly:
No, but they are in a position where they want to be a candidate
No, because they are not bound by our rules until the annual general
meeting when they become a shareholder.
Q642 Paul Farrelly:
So it is quite possible that if they were one of the top three
and, say, came to the play-offs, if they didn't abide by that
rule for it to be publicly seen, it might be the loser of the
play-off final that might become a member of the Premier League?
I think you are, as a lot of people do, leaping to the end of
our disciplinary process. What would happen is obviously if we
deemed them to be in breach of rule, a commission would have to
be formed and that commission would independently decide on what
the appropriate sanction would be to Leeds United. You are already
rather leaping to the expulsion sanction, which again I would
caution you against doing. Certainly, in our view, as drafted,
our rules would require better disclosure of Leeds United's ownership
situation than is currently the case.
Q643 Mr Sanders:
Can you see any benefits in the governing body of the English
game assuming responsibility, or at least a stronger supervisory
role, for the financial regulation of Premier League clubs and
also their ownership?
I think you have to judge us by our journey and the evidence before
you. We have moved our rulebook appropriately. We have moved our
rulebook proportionately and at a speed that can be done only
when you are able to gain consensus from what is sometimes quite
a difficult group to gain consensus from. That comes from an awful
lot of hard work, an awful lot of consultation.
I think we will live by our track record of having
evolved the rulebook from those 142 rules to 814. The rulebook,
can it be improved? Of course. We are always improving it. We
are sitting down now on the next cycle of rule improvements to
discuss what can be done to improve it. But as I say, we are working
with the Football Association, and I think David Bernstein last
week was very clear when he said the best point of regulation
is down at the league level where the members are. Whether we
like it or not, the members of the Premier League will take being
moved along the regulatory curve more readily from their own executive
and their own board than they will necessarily from people one
stage removed. Therefore, if self-regulation is the right way
to go, it is much more powerful when our 14 clubs have put their
hands up round the table to say yes to regulatory change.
I would ask you to look at the evidence of the evolution
of our rulebook. We have a track record of moving the rulebook
on and I think the best people to do that are us. Are we resistant
to other people coming up with ideas, other people coming up with
suggestions, whether it be media pressure or public pressure?
Of course, as with you, opinions are formed from many different
sources. We have to sit here and try and act as custodians of
this game. We have a conservative constitution quite deliberately.
You can't have a small minority interest group come along and
set us off course, but when you get that 14-club majority it is
a very strong majority and it is a very strong method of governance
and I would commend it to you. As I say, we at operating level
have a very good relationship with the Football Association. We
are always prepared to discuss things and I think the way it works
now is good. The idea that somehow we need somebody external to
come along and suddenly impose things upon us is not necessarily
the way forward to make progress.
Q644 Mr Sanders:
But there is a problem here, isn't there? In answer to Paul Farrelly's
question in relation to Leeds, if you have at the moment a rulebook
that says you have to have a proper test and obviously full disclosure
of who owns a club, you ought to be able to say at this juncture
that that club would not be accepted in the Premier League unless
it was prepared to disclose.
Let's be very candid. There is an issue here because our rules
are the same as the Football League rules on this topic. The Football
League brought their rules into alignment with ours last summer,
but this is the first time the rules have been introduced. As
I say, there is an issue in one sense between the Premier League
rules and the Football League rules. I can only give you my honest
evidence that says the Football League may have one view of how
to interpret that rule and what that rule means. We have, I think,
a more stern or harsh view of what that rule means. Let's go back
to the essence of the rule. The essence of the rule was our clubs
absolutely agreed unanimously that we should tell the public who
owns a club. That is the essence of the rule and, therefore, anything
that falls short of that we think is inadequate. I think my point,
Mr Sanders, is in all that we had to get done last summer the
Football League took a view about Leeds United that it is entitled
to take because it is their rulebook they are applying. The fact
that we might have taken a different view is an issue that needs
to be resolved if Leeds get in.
Q645 Mr Sanders:
Presumably this must be a real warning to Crawley Town that they
should not be allowed into the Football League because their ownership
has not been declared.
Again, I ask that you address those issues to the Football League.
Q646 Mr Sanders:
Yes, indeed, but to be consistent, that would have to apply.
I can't disagree.
Q647 Mr Sanders:
I think the problem here is that there is a bit of inconsistency
in not being able to state your rulebook in relation to Leeds
at this point.
Except that the people in both leaguesI commend these people
to you, both Andy Williamson at the Football League, who has been
there almost since time began, and Mike Foster, my General Secretary,
who has been there since the very start and did 17 years at the
Football League before thatare the people who have more
knowledge, and more intimate knowledge, of the rules and the way
these rules apply. It is about applying these rules at the point
of most knowledge. I think it has worked pretty well up until
Q648 Mr Sanders: I
think the public view is they want to see consistency, and in
sport fair play is everything and, therefore, if it is seen as
one rule for one club, it hurts the whole game.
Richard Scudamore: I can't disagree
with you, and what is also interesting is last summer we had some
discussions with the Football League making exactly this point.
Many of those clubs are ex-Premier League clubs. They are of a
size, nature and infrastructure that they look like Premier League
clubs; it is just their league status that says they are not.
Therefore, we said, "Wouldn't it be a good idea if there
was a rule alignment exercise?", which is when all these
rulesthe financial rules, the disclosure rules and ownership
rulesare all aligned. Leagues One and Two, to their credit,
said, "Well, hold on a minute. We don't want to be left out
of this, because why should we, even though in infrastructure
we might be smaller. We aspire to be Championship clubs one day."
The Football League voted in those rules of alignment. Therefore,
I think what we are seeing is just a very early ironing out that
needs to be done. I agree with the point.
Q649 Paul Farrelly: Very
briefly, Mr Scudamore, in your answer to me about Leeds, I don't
think anybody listening to this Committee will go away without
the question as to whether your rule on disclosure will really
bite or whether, at the end of the day, it will be as effective
as a chocolate fireguard.
Richard Scudamore: Well, in fairness,
we can only deal with that at the point when Leeds United are
promoted. They may not be. We can only deal with that at the time
of our annual general meeting, when they come under our jurisdiction.
We will have to stand the test of time on that.
Q650 Dr Coffey: Sir Dave,
you are elected by the Premier League to be on the FA board, but
that doesn't mean you only speak for the Premier League; you speak
for all clubs. Is there a reason why you don't make the suggestion
that this applies to every single football club in the land?
Sir Dave Richards: We do speak
for every football club. You have a gentleman on after us, and
he will be able to tell you how much we have spoken for the Conference
and the way we have tried to assist and the way we are trying
to assist to bring them into the pyramid in a proper way. I do
speak up for those things.
Richard Scudamore: But I think
there's an irony in this line of questioning
Q651 Dr Coffey: What
I am trying to say is we don't have that many opportunities to
speak to individual board members. Has this ever been discussedthe
fact of the excellent rule that you have in the Premier League
of making sure ownership is disclosed? Why have you not perhaps
suggested that for every single football club?
Sir Dave Richards: We have tried.
We have been talking to the FA in the last year about aligning
all the rules.
Richard Scudamore: Just so that
you are clear, we think we all have the same rule; it is just
that the Football League has chosen to apply the rule in the chaos
that is the summer between one season ending and one season starting,
when all the rules get changed. In the chaos of that, the Football
League, for its own reasons, has chosen not to apply the rule
as robustly as we think we will be applying it. But the irony
of this conversation, where you might be suggesting that the Premier
League should be imposing its power in telling other leagues what
rules they should have and how they should apply them, is not
lost. The reality is the Football League has some different rules
that are more appropriate for that level of football, which is
absolutely right. In the subsidiarity, the Football League must
be in some cases able to do that. On issues such as this, of course
there is merit in having common rules, because if it is a rule
that is good for football, it should be in rulebooks.
Q652 Damian Collins:
I would like to begin another topic, but just to finish on this,
it seems to me you may have clarity on what your rules say, but
it is not necessarily clear on how they are enforced, and on something
like this we have a very specific example in Leeds United, who
may be promoted. They may be in a situation that, following your
independent commission in the summer, they are told that they
can't compete in the Premier League. You have not ruled that out;
you urged us not to go down that path, but you said that remains
a sanction that you may enforce. That would be enforced maybe
days before the start of the Premiership season. Would it not
be possible for you to give some sort of ruling based on the situation
that Leeds is in at the moment?
Richard Scudamore: No, because
at the end of the daywell, clearly, the headline will be
generated from this session about Leeds' inability to play in
the Premier League next season. As with all miscreant behaviour,
everybody assumes the ultimate sanction will apply and that expulsion
and points deduction and all these other things will fly. The
reality is that such is the attraction of playing in the Premier
League, it is not unknown for people to relent in order to comply
with our rules. Therefore, the most likely thing to happen when
clubs get promotedwe have rules about press facilities,
we have rules about the match, we have rules because of our international
nature and the access that is required to our grounds, we have
lots of rules that clubs have to comply withis that we
start to talk to clubs, send them formal documentation.
In January, we write to the top 12 teams in the Championship,
talking about a whole raft of rules that they have to comply with
in an operational sense when they get promoted. I am not going
to get dragged intoyou will understand whythe "what
ifs". We will be doing whatever we can, as we always do in
any situation. We would much rather our clubs, our member clubs,
stayed within the rules than stepped outside them so they have
to go to sanction. We will be putting on whatever pressure. If
it arises that Leeds United, on sporting merit, deserve to be
in our league, we will be doing all we can to persuade them to
stay within the rules.
Q653 Damian Collins:
I appreciate that. What I was askingI think probably colleagues
have been asking itis whether you could say, "This
rule is so serious that if breached it could lead to a club being
excluded from the league," or whether it is more of an age
where it is more likely there will be some sort of sporting or
financial sanction applied.
Richard Scudamore: Again, we are
not involved in the sanctioning. I think, without rehearsing this,
we would deem it more serious than could be dealt with under our
summary powers. We only have summary powers to fine a club up
to £25,000. After that, it goes to an independent commission;
that independent commission will decide. That independent commission
has the range of sanctions available to it, from a small fine
up to expulsion. It will be for that commission to decide.
Q654 Damian Collins:
A different area of rules: financial fair play. You will be familiar,
I am sure, with the fact that this is an issue that we have discussed,
and I suppose it goes back to the spirit of what the rules are
and how they are enforced. You said UEFA's financial fair play
rules are an area of UEFA practice that has not been incorporated
into what you referred to as the Premier League's licensing system.
David Bernstein said in our previous session, "I would like
to see financial fair play potentially extended across the Premier
League and into the Football League as well." When we discussed
with some of the Premier League chief executives and chairmen
a few weeks ago, they also said they would look favourably towards
that. What is your view?
Richard Scudamore: We have had
full consultation on this. Prior to the rule changes of last year,
we went again round the houses on a full club discussion. We went
round again last autumnSeptember, October, November, individual
club discussions. In the main, they are supportive. In fact, we
are entirely supportive of this break-even concept, but given
that 19 of our clubs have applied for the licence anyway this
year, they all have to comply with it if they wish to continue
to do that. The only thing the clubs have said is, "Yes,
it is a good idea, but before we decide to change our rules for
it to apply to everybody, can we not see a little bit how it might
work, and is it not sensible just to see if it actually works?"
There are some doubts still about what it will achieve, because
one of the things it may achieve is that you lock in the natural
order where only those that have extremely big revenues, of course,
can have extremely big expenses.
The one thing about our league this season is
the joy of seeing everybody who has come up competing. In fact,
at no point has a team who has been promoted ended up being in
the bottom three this season, so you have a situation where, looking
at our league this season, the competitiveness within it is because
teams have come up and had a go. One of our issues is, is it so
wrong that Mr Al-Fayed or Steve Gibson at Middlesbrough, when
he was with us, or Ellis Short at Sunderland or Dave Whelan at
Wiganthese people who have benefactor fundingshould
come along and try and get their club into the next level, into
the next echelon, which will bring itself bigger revenues, which
will then enable them to stay within the fair play boundaries
a bit more? So, we have shaped UEFA financial fair play criteria.
The leeway that clubs have with the 45 million lossesthe
way the rules are now implementedis, we think, proportionate
for those who are in the European competition.
I think our clubs are not objecting to it. They
think it might be a good idea and they agree with break-even,
but to launch full scale into applying it everywhere at every
level to stop the local businessman made good investing in his
local team really affects the essence of English football. If
you go back to 1888, that is how we started, what it is about,
and I would caution against us suddenly saying, "Yes, that's
a great idea. Let's put it in everywhere," because I think
the further you go down the pyramid, it gets harder. Having said
that, cost control, cost containment, break-evencan't argue,
and would never argue, that that is not a good concept.
Q655 Damian Collins:
Are you not concerned that you could end up with a league where
half the teams in the league are voluntarily complying with it,
because they want to compete in UEFA competitions, and the other
Richard Scudamore: But if that
means that the other half are able to get themselves into the
European qualifying positions by way of improving their sporting
position, they will have to comply with it. So there is no team.
Look at now: all 19 have applied, even those that aren't anywhere
near the qualifying positions. There are a number of clubs who
could win a UEFA Cup place on the basis of fair play. There is
no club in our league that has ruled itself out from European
competition, and I can't imagine a club qualifying for Europe
and not wishing to play in European competition, because that
is essentially what our league is, and every club is out there
striving to deliver for its fan base in European competition.
Q656 Damian Collins:
But it sounds like it is going to come in by the back door, so
why don't you find a way of implementing it properly?
Richard Scudamore: It is just
a question of what. I keep saying, on balance I think it will
come in. It is just, why would you straitjacket some of your clubs?
This is not going to bite or affect many of clubs who have huge
revenues, such as the Manchester Uniteds of this world. The idea
that they can't live within their meansthey have £300
million in income, can spend £300 million and still stay
within the rules. When you have smaller clubs that are aspirationalcoming
up from the Championship, for examplewhy shouldn't those
clubs, if they have the owners who have those funds available,
be able to invest them to make their club slightly better to get
them into that thing? Our nervousness about itwe are not
objecting to it. I don't want it to sound like I am. We think
it is a good concept, but there is just one, if you like, caution
or cautionary note that we are expounding, which is why would
you stop those clubs breaking into that group?
Q657 Damian Collins:
I fully understand that, but you said you think on balance it
probably will come in. Do you think that will because the weight
of clubs seeking to comply with it will be such that they will
Richard Scudamore: Well, effectively,
when you have 19 applying for the licence, we will have it. It
works the other way, doesn't it? We don't see any need to extend
it right the way down through the system, because we want other
clubs to be able to break into that group.
Q658 Damian Collins:
I wanted to touch on something that was in your written submission
that relates to some of the financial sanctions you already have
in regards to HMRC payments. You said that, "Where the board
reasonably believes that a club is behind in its HMRC liabilities,
it may impose a transfer embargo and/or require the club to adhere
to an agreed budget." Have you ever been in a dialogue with
a club that means you might be required to enforce those rules?
Richard Scudamore: No. This was
a post-Portsmouth rule and, quite frankly, we don't see why in
the first instance HMRC should treat clubs any more tolerantly
than they do small businesses that they expect to pay straightaway.
We would expect them to do that in the first instance. We now
have a reporting mechanism where, effectively, no clubs are allowed
to have any HMRC debt. Since the rule has been in, we have never
seen it, no.
Q659 Damian Collins:
There was a press report that suggested, following a parliamentary
question, that about £14 million was owed by Premier League
clubs to the taxman. Have you discussed that with any of the clubs?
Richard Scudamore: No. Well, it
is not that at all. That is nearly all Portsmouth from the Portsmouth
Damian Collins: So it is not new liability,
Richard Scudamore: No.
Q660 Damian Collins:
In terms of the sanctions that are imposed, the idea struck me
of a transfer embargo on clubsif clubs have HMRC debt they
are probably in quite a bad financial state anyway. Do you think
those sorts of financial sanction are effective? Should you consider
using sporting sanctions against clubs that are clearly in quite
serious financial breach?
Richard Scudamore: Well, there
is what the rulebook says, and there is also what our ability
as the board to get clubs to behave in a certain way also does.
Of course, we have significant funding that we give to the clubs
in two main tranchesonce in August, once in Januarythen
we have a monthly stabilised cash flow, which again is not insignificant.
I am absolutely sure that before we would need to go to the rulebook,
we would use our good offices to use some of those funds that
are not legally the clubs' until they have fulfilled our rulebook.
But we would certainly, I would think, look to be using those
funds to make sure HMRC is
Q661 Damian Collins:
Do you mean you would give HMRC the money that would otherwise
go to the club at each point?
Richard Scudamore: Well, certainly
we would encourage the clubs to allow us to do that, yes, to avoid
them getting into that situation.
Q662 Damian Collins:
Is that something you have discussed?
Richard Scudamore: That is exactly
how we have applied the rules in the past, yesthe ability
Q663 Damian Collins:
Yes. Obviously you have oversight to a club's ability to meet
their football obligations and liabilities, and we have discussedas
I am sure you will be awareat great length the football
creditors rule. When we discussed that with David Gill and the
other club representatives, they felt that the football creditors
rule had served its purpose. In previous sessions, Lord Mawhinney
explained how he had tried to get the Football League to get rid
of it, and the current Chairman of the League said that he couldn't
find a moral argument for keeping it, but was going to keep it
anyway. What is your view?
Richard Scudamore: This is a very
interesting one, and it is interesting that the people who run
the FA, Mr Bernstein and Mr Horne, the current Chairman of the
Football League, and his Chief Operating Officer, Andy Williamsonthose
of us who run competitionswill defend it, and we will defend
it on the basis of the chaos that ensues if you don't have it.
We are a closed system. We trade on a closed basis between each
other. If a business fails, the real sanction should be expulsion.
The problem with expulsion is it damages far more
than the club involved. For example, had Portsmouth gone straight
into expulsion in the January/February of last year, every single
point that they had gained would have been taken off the clubs
that had already beaten them. More importantly, anybody they had
beaten would suddenly, effectively, have a three-point advantage.
So it is absolutely essential that the clubs are forced to play
each other and to play out their fixture list, and therefore it
is essential that football creditors are paid. Another thing on
this: there is no moral basis for saying that the St John's ambulancemen
or the local businesses shouldn't be paid. Of course they should,
and that is our starting positionthere should be no bad
You have more say in the insolvency laws in
this country than I have and if you wish to change the insolvency
laws to allow charities or small business with a certain turnover
threshold to become preferred creditors or preferential creditors,
I would certainly support that. But on balance, it is the best
of a bad situation. Because we are a closed system, chaos would
ensue if people's playing records were eradicated. If expulsion
is the only option, we think it is a bad option. Therefore, the
football administrators, to protect the integrity of the league,
would support the football creditors rule. I understand that the
integrity of our league takes precedence over the small business
creditor, which is unfortunate, but I am not ever excusing people
not paying their debts.
Q664 Damian Collins:
I think there is another element to this, and this was a point
that David Gill made when he gave evidence to us. He agreed with
the idea that if the football creditors rule did not exist clubs
would have to be more open and transparent in their financial
dealings with each other, because there would be greater risk,
and transfers and payments between clubs, which are a very big
part of clubs' expenditure in putting their teams together, may
have a helpful and deflationary impact. I think Lord Mawhinney
also talked about the integrity of the competition and whether
you can protect the integrity of the competition if clubs are
using their liabilities to other suppliers to fund their football
Richard Scudamore: David Gill
is probably the best chief executive in football. He runs a club,
but he is in a fortunate position where he runs a club with the
ability to trade almost on a cash basis with others. There is
the idea that across professional football all 92 clubs should
go into a full due diligence situation in terms of this. Given
we have this system, remember in our particular case we generate
significant central revenues. Those contracts are entered into
only with the Premier League, not individual member clubs. We
have significant funds such that when this situation comes along,
as it did in Portsmouth, we are able to keep, for example, Watford
in business, effectively. Watford were owed money by Portsmouth.
We were able to satisfy other foreign clubs that were owed money
by Portsmouth, which has given us great standing across European
football, because I think we are the only league that has ever
done that, and has satisfied club debts. So I think it is easy
for Manchester United to say, "Everybody should do due diligence,"
because they are in a situation where not many people are buying
players from them, and when they are buying players themselves
it is a very different position. As I say, he comes at it from
a club perspective. I sit in front of you as a league organiser
with a slightly different view.
Q665 Damian Collins:
What you seem to be saying is it is all right for clubs that do
not have big cash flows to engage in financial transactions with
other clubs knowing that they may not be able to meet those liabilities,
but if they can't they have their VAT account or other unpaid
bills they could pay it from.
Richard Scudamore: You go to what
is the essence of the game. I would advise cautionsteering
clear of over-regulating or over-prescribing something that might
circumvent the essence of the game. The essence of the game since
it startedthe thing that gets fans most interestedis
the buying and selling of players, the trading of players, on
the transfer deadline. You have seen the media hype around transfer
deadline. We know more about what is going on from the media hype
sometimes than we do from the contract registration documents
that are coming into our office. The essence of the game throughout
my 14 years in the executive capacity of professional football,
whenever you get to a room or the pre-meeting coffee discussions,
is players and player movements: who is buying whom, who is selling
whom, what is happening? The idea that you would somehow put this
administrative blockage of a due diligence process in front of
every single trade, club to club on transfer deadline and everything
else, is a place we wouldn't want to go.
Q666 Ms Bagshawe: Surely
greater transparency would prevent that. You just gave the example
of Watford being protected. Watford wouldn't have allowed Portsmouth
to run up such debts with it if it had clear sight of its balance
sheet, and without the football creditors rule that would have
been the case.
Richard Scudamore: Okay. We have
transparency, don't we? You have seen the Deloitte report. There
is no other country that can produce the Deloitte annual report
of football finance on the same basis, because certainly in US
sports you won't see that level of transparency. We are all required
by regulation. We are UK-registered companies. That means that
everything has to be filed with Companies House. Of course, it
would be good practice for a club to establish with another club
whether they can pay, and that is why a lot of deals do and don't
go through. That is done now. I don't think, though, it is the
solution to obfuscating the football creditors rule. As I say,
I am not here defending many aspects of the consequences of the
football creditors rule, but on balance I think the Football League,
the FA and I agree that, of the options available, it is better
to have the rule than not have the rule.
Damian Collins: It does seem a pretty
sad state of affairs if the
Chair: We need to move on.
Jim Sheridan: In my experience, and in
the experience of other elected colleagues in this place, abiding
by the rules is not always the best form of defence.
Q667 Paul Farrelly: I
will be brief on this section, which leads nicely on from your
discussion of how important it is to have integrity and stability
when you are running competitions. When we talked about local
benefactors buying into clubs, would you prefer them to put in
equity rather than take on debt?
Richard Scudamore: I think in
a hierarchical situation, yes. That is, you would prefer them
just to put in equity, yes, as opposed to debt.
Q668 Paul Farrelly: The
oft-mentioned Lord Triesman made a contribution in a speech on
debt. Why did you and the Premier League take such exception to
what he had to say?
Richard Scudamore: Again, you
have to put it in the context of the timing. We were having what
we thought was a very good dialogue with Lord Triesman and with
Andy Burnham, the Secretary of State, all through that summer.
We started the dialogue in July; we continued it in August. We
were all entitled to a holiday and off we went. We came back and
that dialogue stopped, and almost the next thing we had was these
unilateral speechesboth by Andy Burnham and by Lord Triesmanabout
the state of English football. If there was any affrontedness,
and I don't deny there was some, it was a sort of break with the
discussions that we were having. Having said that
Q669 Paul Farrelly: So
your reaction, you were described as "tired and emotional".
Richard Scudamore: No, I don't
think it was tired and emotional at all. We were rather sanguine
about it. It was others. Clearly, the media enjoyed the theatre
of Lord Triesman at a speech called Leaders in Footballinterestingly
namedand the issue is around the fact that clearly we are
proud of English football. I think this comes through. We are
proud of what the Premier League has achieved. We are very proud
of what the Football League has achieved. We are proud of where
the FA sits in relation to other football associations around
the world, where the England team sits. It is the one teamprobably
England and Brazilthat attracts more international interest
than any other team, so when you are very proud of something,
my view in terms of when you are trying to move the agenda on
is that you should perhaps not criticise it quite as directly.
On good leaders, I think there is an art of leadership. The first
art is to get people to follow. Therefore, if you are going to
display real leadershipyou will have seen this in your
worldyou have to get people either to follow, vote for
you or at least engender some support, and I think it is interesting
tactics people have deployed in trying to get that support, but
it is not one of the ways we would have chosen to do it.
Q670 Paul Farrelly: From
your answer about preferring equity to debt, who wouldn't?
Richard Scudamore: Yes, exactly.
Paul Farrelly: I take it you would agree
with Sir Martin Broughton, nobody's fool as we have seen over
many years, the Liverpool Chairman, when he said, "If you
are leveraged"by which he means highly leveraged"that's
bad for a football club." Is that a statement of fact that
you would agree with?
Richard Scudamore: Let me take
it one stage further. If it was too highly leveraged, yes; if
it was leveraged, not as good; if there was no leverage at all,
obviously better. Therefore, we are into the proportionality of
debt, and I think that is something that our new rules will bite
on, because when you have to put your future financial information
in, when you have to put your business plans inwe didn't
have these rules four years agobut now our rules are tighter
on this than the UEFA licensing and the UEFA rules, because the
UEFA rules don't per se deal with debt, but ours will deal with
debt, and the appropriateness and level of debt. So, yes, clearly
it goes without saying it is about the amount of debt and the
question, is the club at risk? Our role is to make sure that clubs
are sustainable, that they stay in business, and we don't have
a role that says each club must be able to win the Champions League.
That is beyond our power, beyond our reasonable control, but certainly
in terms of sustainability that is the issue, and, yes, clearly
there is a number at which proportionately debt has to be a risk
and that would be covered, I think, by our new rules.
Q671 Paul Farrelly: The
final question, as time is moving on, relates to your position
when it comes to any financial regulation UEFA is involved with.
You have made strides with your own rulebook, so is there no role
for the Football Association in any financial regulation?
Richard Scudamore: Of course there
is a role for the Football Association, because they have an overarching
role in the way it works. But UEFA themselves are only competition
owners; that is what they are. They organise their own competitions
and they say to the clubs that want to play in those competitions,
"If you want to play, these are the rules." It is the
same for us. If there is a lacuna in the rules or if there is
a gap in the rules, yes, we would be open to that dialogue. We
would also be open to the dialogue as to who applies those rules.
We are not against that at all.
Q672 Paul Farrelly: Very
quickly: has the Football Association any greater role in financial
regulation beyond what you are already doing than just approving
the rules of the FA Premier League?
Sir Dave Richards: The executives
of the Premier League and the Football Association meet every
second Friday to discuss all the implications of this, and they
come up with scenarioswhether it is financial or about
players. They discuss this every second week. They bring it back
to their bodies. Their bodies then agree the formula and it goes
to the board. So if the FA wants to talk more about finance, it
has ample opportunity to do it at the Friday FMT with the senior
Richard Scudamore: Just so you
are all clear, though, and maybe I have not made it clear, the
FA are the people who are ultimately the licensor of the UEFA
licence, so the work, much of the data gathering and much of the
evidence is gathered by the Premier League Executive. That is
all presented to FA, but the ultimate people who decide on the
UEFA licences are the FA. They have an integral role in the financial
regulation of football.
Q673 Ms Bagshawe: I know
there are pressures on time, so would you comment on two questions
at once. This is related to debt in the English model of football.
Obviously, there is a growing differential between the revenue
gap between the Premier League and the Football League. First,
do you think this encourages clubs to overspend, to gamble on
success, whether that be staying up in the Premier League or joining
the Premier League and entering the Champions League? As a corollary
question, we have heard evidence to the Committee that the parachute
payments if you are relegated, which now last for four years,
are distorting competition in the Championship. Do you think that
the Premier League has a role to play in cost control?
Richard Scudamore: Clearly, that
is why we are advocates of the concept of break-even, and repeating
the financial fair play concept of break-even is unarguable. In
terms of a gamble, of course football is an optimistic, upwardly
mobile, aspirational business.
Ms Bagshawe: Nothing wrong with that.
Richard Scudamore: There is nothing
wrong with that. It is entrepreneurial, and Mr Cameron would be
proud, and would have been in all his speeches in the last three
weeks, including in Cardiff at your spring conference. That is
exactly what football is. It is about the aspirational, the entrepreneurial,
and saying, "We think we can invest our money and we think
we can improve our lot." So yes, of course, the best thing
and worst thing about the Premier League is how successful it
has been. It has been a success in terms of its attendance growth60%
since we startedour viewing and our audience growth, as
well as our revenue growth. That success has meant more and more
clubs want to be part of us. The Championship clubs all want to
be in it, despite the fact that when they are not in it they like
to criticise us, but they all want to be in it, and that is the
reality of English football.
Clearly, we are not sitting here advocating that
people overstretch themselves to the point of putting them at
risk, which is why we have talked probably more than we should
about all the rules that are now in place to stop that happening.
When it comes to the parachute payments, they are, again, in a
sense a necessary mechanism. They have been in it since the start,
because when clubs get promoted we want them to compete. We don't
want clubs to come up, bag the money, take it as profits and just
go back down again, because it is a sporting competition.
We can talk about money and finances and everything
else, but the integrity of the league this season is more in evidence
than ever. The clubs who have come up have competed: Newcastle
have competed. Blackpool have had a fantastic run, considering
the economics mean they shouldn't have won anything like the number
of points that they have, if you believe the pre-season pundits.
West Brom have suddenly got themselves into not a comfortable
position, but a decent position this weekend. So you want your
clubs to come up and compete. That means you want them to spend
money, invest. We require them to invest heavily in infrastructure.
No matter what happens to Blackpool this season, they will have
a better infrastructure as a club, a better stadium and better
facilities, because they have invested that money in making their
club better; they have community schemes. Every aspect of Blackpool
Football Club has been enriched by being in the Premier League,
irrespective of whether they retain their league status.
Now, the consequence of that is to de-risk some
of that when they get relegated; they need a softer landing. What
we have done is the parachute payments, which have always been
there. On the extension to four years, it is only half what they
would have got, so the positive side of this is that 12 of the
24 clubs in the Football Leaguehalf of themenjoy
the benefits of the parachute, which is good for the sustainability
of those clubs. Basically, if you want them to compete when they
come up, you have to protect them when they go down. Interestingly,
it has not distorted the competition, if you look at the Championship
this season. I haven't checked the league table after last night,
but I don't think there was a team that was relegated. No, there
isn't. Neither Burnley, Hull nor Portsmouth is in a play-off position
to come back up, so you can't believe it has given them a huge
competitive advantage over the others.
Q674 Chair: On the recent
European Court of Justice case, or rather, the opinion of the
Advocate-General, that may lead to an ECJ judgment on the sale
of exclusive territorial rights, have you done an assessment of
how damaging that will be if it is upheld?
Richard Scudamore: We haven't
done an assessment of how damaging it can be, because I don't
think the opinion is clear enough as to what the outcomes will
be. The opinion is difficult; it is convoluted. It suggests certain
things that might happen. As you will be aware, the process of
this is that the opinion gets put towards the ECJ, the judges.
The judges have to answer, I think, 18 questions set by Justice
Kitchin here in the UK. Then the answers to those questions come
back and he has to weave them into his ultimate decision. What
is very hard to see at the moment is how we get all this to add
upeven the copyright issues that have been explained, even
this concept where it might be possible to make a legal distinction
in the UK between a domestic card not being allowed to be used
in a commercial premises in the UK. So, a UK domestic card might
not be allowed to be used in a pub or commercial premises, but
somehow a foreign domestic card couldunder some interpretation
of the freedom of movementbe allowed to be used in a pub
or commercial premises in the UK. It is difficult; it is complicated.
What I do know is this. You questioned the Secretary
of State last week on this particular topic, and we are very grateful
for his support on this and UK Government support, where it is
essential for content owners to be able to sell their rights in
a way that works for consumers as opposed to some ideology of
some pan-European market. We don't sell the same Premier League
product across Europe. We sell our rightsthe components
to a Premier League productacross Europe. It is then for
the people in each territory and each country to create a product
that they in that market require.
With your other hats on as Culture and Media, you
will understand the territoriality and the essential nature of
territoriality in that regard. So the French, when they produce
Premier League coverage in France, concentrate often on French
players, French clubs. It is scheduled to avoid the French league.
Similarly in Italy, in Spain, in other countries, when they show
our rights, they not only concentrate on an element of the Premier
League that is more relevant to their audience, but schedule it
around what is a unique part of each country's culture.
It is the same in this country, which is the
reason why we will fight strongly, for example, against if Mr
Platini and others come along with a summer calendar for football,
because we believe it is pretty difficult to play cricket in this
country in the winterrain stopped play would be rather
more prevalent. Therefore, it is things like that, where you have
to protect the sporting culture of a country and you have to support
media being available on a territorial basis, because that is
the way you create cultural diversity and protect the culture
of each individual territory. It is an important case, John
Chair: It is an extremely important case.
Richard Scudamore: And I think
you should concentrate some of your minds and efforts on it.
Q675 Chair: Indeed. That
may be your view, it may be our view, it may be the Secretary
of State's view, but at the end of the day if it is not the European
Court of Justice's view, there is not a lot we can do about it.
Richard Scudamore: No, except,
as I say, the problem with this case is that it is possible to
sit down and work out theoretically what we might do about it,
but unfortunately every solution is not as good for the consumer,
not as good for the broadcasters in each country as what currently
happens. The idea, for example, that we might have to sell our
rights on a pan-European basis does rather make a nonsense of
having broken our rights down into packages, with our other European
Commission challenge, with Ofcom ensuring that we encourage plurality
in the media world to make sure that more than one broadcaster
has our rights. All this kind of stuff contradicts all the things
we have been discussing in a regulatory sense with these people
up until now.
Q676 Chair: I entirely
understand that, but is that a case that you think you are capable
of persuading the European Court of?
Richard Scudamore: Unfortunately,
we don't have any chance now in front of the European Court, do
we? That is the way the process works. They will be crafting their
opinion. If there is anything that the Government can do, whether
this Government or whether other Governments across Europe, to
weigh in with their views, I think that is important, because
we need toand that is what my lobby people will do.
Q677 Chair: But you will
have begun to think about what will be the impact if this opinion
Richard Scudamore: It leads you
to thinking about, unfortunately, the UK as just one element of
Europe and where you would have to do whatever you do on a pan-European
basis, which is a bit odd because clearly the UK has more interest
in our Premier League rights than any other country in Europe,
and you would expect that, wouldn't you? So the idea that we suddenly
think of Europe as one market, when it is effectively 53 markets,
is possible; it is doable. It doesn't hold any fear to us, but
it is just a very convoluted, complicated way of going about doing
something when the current system works perfectly well.
Q678 Chair: But it is
also likely to result in a drop in income.
Richard Scudamore: Again, you
just can't make that stretch. In some ways, the other challenge
that we have in terms of the Ofcom pay TV review and our appeal
to that is important, because it hits right to the heart of a
plural media rights market, where, as you know from that particular
case we are arguing, if all these other media companies have a
wholesale offer situation with Sky, which has to wholesale all
this sport content to them, their incentive to bid for our rights
will be vastly reduced. In a sense, that has more potential threat
to the income of the Premier League than perhaps the ECJ case.
Q679 Chair: On the issue
of broadcasting income, you get about over £1 billion in
broadcasting income. It was suggested, I think by the Sports and
Recreation Alliance, that you had signed up to a target of investing
30% of net broadcasting income into sport£300 million.
Are you meeting that target?
Richard Scudamore: We are more
than meeting it. There is one word you have missed out, if I may
correct you. It was net broadcasting income.
Richard Scudamore: What the code
absolutely envisages is the cost of putting on that competition
must be able to be deducted from your gross income. While we can
sit and talk about our £1.2 billion worth of revenue, of
course we have a huge cost of sale, and that cost of sale is the
20 clubs' aggregated costs, player costs, stadium costs in staging
the competition. Any other governing bodyfor example, the
FAis allowed to deduct the cost of running the FA, the
cost of putting on the England matches and the cost of everything
else, so to be treated like any other sports governing body we
have to be allowed to look at net revenue, which is when you have
basically extracted your cost of sale of putting on the show.
We stand up very well indeed. Our £162 million we gave away
by way of solidarity13.4% of our revenue. There is no other
sporting body in the worldno other business in the world,
I don't thinkgives away 13.5% of its revenue. Not of its
profit, of its revenue. So we stand up extremely well to anybody
else, whether in a sporting context or in a business context.
Q680 Chair: So what is
your estimate of net broadcasting income?
Richard Scudamore: Well, it is
a net loss, to be absolutely honest, so goodness knows what that
means our percentage to contribute is; it must be infinite.
Q681 Chair: So it is
a pretty meaningless commitment to say you are going to give away
30% of what is a net loss.
Richard Scudamore: I would ask
you to concentrate on our submission: £162 million given
away. If you can show me another sporting body or another company
that gives away 13.5% of its gross revenue it will be very interesting.
Q682 Dr Coffey: I wonder
if Mr Scudamore could just clarify where that kind of money goes?
Is that referees or is it pitches or
Richard Scudamore: What, the £162
Dr Coffey: Yes, or is the parachute payments?
Richard Scudamore: No, the £162
million effectively goeslet me check the detail of it.
I wouldn't want to mislead you. Yes, £162 million of it goes
into solidarity and good causes. That is roughly broken down as
£60 million in parachute payments, about £62 million
in solidarity paymentsthat is both for the Football League
and for the Football Conference, who you will be speaking to laterand
the rest to charitable causes, charities.
Q683 Dr Coffey: So about
£10 million outside, if you like, the professional clubs?
Richard Scudamore: No, about £42
million, I think, goes to good causes in the community. That is
in our submission.
Dr Coffey: Oh sorry, £162 million.
I wrote down the figure wrong.
Richard Scudamore: Yes, £162
million, with £40 million-odd to charity and good causes,
Q684 Dr Coffey: Supporters.
At the end of the day, the game exists for players, but supporters
pay for the success, whether through Sky subscriptions, ticket
prices or similar, but they get terribly frustratedprobably
the cause of this whole inquirybecause they feel they have
no say in the governance of their clubs. What additional measures
can the Premier League take to increase that say?
Richard Scudamore: Well, again,
we would absolutely commend any club having a dialogue, and our
rulebook envisages a supporter liaison person at each club; we
would encourage all clubs to have a decent and open dialogue with
their fan base. You will also seeyou can do this another
timethe appendices that we put into our submission. There
is no other sporting body, I think, that does the extensive nature
of the research that we do, among our fans and our non-fans. We
are absolutely in touch, I think, with what all fans feel, and
that is difficult because there are very vastly different opinions.
I think in a practical sense we fund now Supporters Direct, and
we have done for some time.
Q685 Dr Coffey: Will
you continue to do that at the current level?
Richard Scudamore: We will continue
to make available, as you know via the Fans FundThis is
an ongoing debate as to whether we, the Premier League, should
be funding these organisations. We took up the Supporters Direct
funding when Government decided it didn't meet the Government's
criteria of participation only. It is the same in all the organisations,
such as the Football Supporters Federation and the National Disabled
Supporters Federation: for the central bodies that currently existassociations
formed by those like-minded people who wish to share common viewswe
will continue to make funding available to them to achieve some
of their aims. They admit by their own efforts that they would
rather find more sustainable sources of funding, because they
find it awfully odd being paid for by the Premier League, but
we were certainly always open in that dialogue. I have personal
dialogue with the leaders of all those organisations, as do my
Ultimately, you cannot argue against having
decent fan liaison and decent fan communication, but, as you have
heard in evidence before this Committee, not every supporters'
trust thinks it is right that they should have a seat on the board,
because they wish to remain more removed from the fiduciary duties
that that would bring. There is a raging debate about this. I
would put you back to the evidence. Our evidence is that since
the Premier League was formed, 67% more people are coming through
the turnstiles and attending our matches. English football was
at its worst throughout the 1980s in terms of violence, of hooliganism,
stadium disasters and no television deal. On taking the game back
from that positionmore fans are more interested in our
surveys, very independently done by Populus, and again I offer
up to the Committee access to all those Populus surveysthe
reality is there are more people interested in our league and
what we do now than there were before.
Q686 Dr Coffey: You mentioned
that you are a bit of a closed board; there is no other entrance
in and out, which was the justification for the creditors rule.
I recognise you are all football supporters, but given that you
are a closed board, how do you get new, fresh blood in? I suggest
to you that one way, Sir Dave and Richard, would be to say that
there is a fixed-term limit on how long people can be on the Premier
League board to encourage new blood in, and perhaps a role for
supporters on that board as well.
Richard Scudamore: If you go back
to my original description of what the Premier League board really
is, the Premier League board is effectively the clubs, and Mr
Parry will be able to advise you exactly on the intentions when
the shareholders set the thing up. We have new blood all the time.
In fact, we have new blood, we have old blood. We take by rule
three new clubs every year, but then the clubs themselves turn
over and, effectively, the clubs come along as shareholders and
that is the new blood. We are for ever being challenged by new
blood on what is effectively our board, which is our clubs.
Q687 Dr Coffey: With
respect, Sir Davewho I think has been a distinguished Chairman,
and has certainly seen the Premier League growhas not been,
if you like, replaced. Is there a view that the chairmanship should
be not quite such a long-term election?
I think that is entirely a decision for the 20 shareholders. We
turn up and say to each other before every shareholder meeting
that it is like reapplying for your job at every single meeting,
and our predecessors sometimes went to those meetings and left
without their jobs.
Q688 Dr Coffey: I would
be really interested to hear Sir Dave's view.
Sir Dave Richards: No, it is absolutely
true what Richard tells you; you are as good as the last meeting.
You could turn up at a meeting and find out it is your very last.
On terms, you get elected every year. If you have a bad year you
don't get re-elected. There comes a time when you think to yourself,
"Well, perhaps we're okay," but the Premier League is
so fluid, and Mr Parry can tell you the times that we have hadthe
way it has changed.
But we are governed in such a way that the 20
clubs are the governance of the Premier League. The board has
a set of rules and it is a set of rules that we can work to, so
the board is not like you believe it to be, like a PLC, because
the PLC part is the shareholders and they are the board. We are
very limited in how we can make decisions as the two members of
the board. Mr Parry will tell you that he helped write the rules,
so he will tell you how difficult it is that you must work within
those parameters. If I break those parameters, I can tell you
I will be out overnight.
Chair: We have to stop there. I thank
the two of you very much.